# Tencent Music Entertainment Group American (TME) fundamentals

Data as of 2026-09-08. NYSE, United States. Sector: Communication Services / Diversified Telecommunication Services. Price $8.26, market value $13.5 billion.

## Valuation
- **P/E (trailing): 9.7×** (5-yr avg 2.4×, 3-yr avg 2.4×). Tencent Music Entertainment Group American trades at 9.7× trailing earnings, well above its own five-year average of 2.4×: investors are paying up relative to the company's past. The Communication Services median in the September 2026 study was 21.1×. Forward P/E is 8.2×, lower than trailing, so analysts expect earnings to grow.
- **Price / sales: 2.7×**. Each dollar of revenue is priced at 2.7×.
- **Price / book: 1.1×**. The shares trade at 1.1× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 6.2×**. Enterprise value is 6.2× operating earnings before depreciation, the multiple that ignores how the company is financed; below 8× is inexpensive for most sectors.
- **Free-cash-flow yield: 11.2%** (5-yr avg 28.6%). Free cash flow equals 11.2% of the market value, below its five-year average of 28.6%, so the shares are pricier on cash than usual. Above 5% is generally attractive.
- **Earnings yield: 10.3%**. The inverse of the P/E: 10.3% of the price is earned each year.

## Profitability
- **Gross margin: 44.3%**. Tencent Music Entertainment Group American keeps 44.3% of revenue after the direct cost of what it sells.
- **Operating margin: 29.6%**. 29.6% of revenue is left after running the business, an exceptional level.
- **Net margin: 33.6%**. 33.6% of each dollar of sales reaches the bottom line.
- **Return on equity: 13.8%**. 13.8% on shareholders' equity is solid.
- **Return on invested capital: 13.9%**. Return on all capital, debt included, is 13.9%.
- **Return on assets: 8.7%**. Each dollar of assets produces 8.7% of profit.

## Growth
- **Revenue growth (1 yr): 15.8%** (3-yr 5.1%/yr, 5-yr 2.4%/yr). Revenue grew 15.8% over the last year, against 2.4% a year compounded over five years: growth is accelerating.
- **Free-cash-flow growth (3 yr): 6.9%/yr**. Free cash flow has compounded at 6.9% a year over three years.

## Financial health
- **Debt to equity: 0.05**. Debt is 0.05 times equity: a conservative balance sheet.
- **Net debt / EBITDA: net cash**. Tencent Music Entertainment Group American holds more cash than debt.
- **Interest coverage: 73.8×**. Operating profit covers interest 73.8× over, a safe margin.
- **Current ratio: 2.22** (quick 2.22). Current assets cover the next year's liabilities 2.22 times.
- **Altman Z-score: 2.35**. A Z-score of 2.35 is in the grey zone; not distressed, not clearly safe.
- **Piotroski F-score: 7/9**. 7 of 9 fundamental checks pass: strong and improving financials.

## Dividends
- **Dividend yield: 2.91%** ($0.24 per share, trailing). Tencent Music Entertainment Group American yields 2.91%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 18%**. 18% of earnings goes out as dividends, leaving room to keep raising it.
- **Consecutive years of increases: 2**. 2 straight years of increases.

## Analyst view
- **Analyst consensus: buy** (28 analysts). 28 analysts cover Tencent Music Entertainment Group American; the consensus is buy, with an average price target of $13.20 (+60% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): -65.6%** (YTD -51.6%, 3-mo -9.0%). The shares are down 65.6% over twelve months including dividends.
- **From 52-week high: -69.1%** (4.0% above the low). Trading 69% below its 52-week high, deep in a drawdown.
- **200-day average: below**. The price sits below its 200-day moving average, the usual definition of a downtrend.
- **RSI (14-day): 38**. An RSI of 38 is neutral.
- **Beta (1 yr): 0.99** (volatility 47%). Beta of 0.99 against the S&P 500: the shares move roughly with the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=TME · Page: https://foliofundamentals.com/stocks/tme

Not investment advice.